David Landes, economic historian

 

In January this year I wrote about the wealth of nations, including a paragraph on David Landes, an economic historian whose work I greatly admired. Today I have been passed on the sad news that he is dead, and I wanted to draw attention to some of his conclusions.

The brief mention I made of him in my original post is shown below.

Smith’s account (on economics) has not been bettered, but it has been extended by many economists. One particular economic historian with a great respect for geography, David Landes dared to update the text (1998) in a scholarly masterpiece which he entitled “The Wealth and Poverty of Nations”. His conclusion, stated with some reluctance, was that the difference between rich and poor countries was based on culture. He went no further than that, and certainly made no mention of differences in intelligence or personality.  However, his key observations were that successful societies innovated, and taught their children how to manage those innovations. This is intellectual problem solving in all but name.

The full post, which gives all the context, is in the link below.

http://drjamesthompson.blogspot.co.uk/2013/01/the-wealth-of-nations.html

David Landes was at pains to be a good communicator. He wrote short words in short sentences. He was too much of a scholar to boil down his key points on one slide, so I did that for him, on a single page I had up on my office noticeboard. It confused many of my psychiatric colleagues. It was drawn from page 217 of “The Wealth and Poverty of Nations” Little Brown and Company, 1998. ISBN 0-316-90867-3

Ideal case for material progress and general enrichment:

1 Master new technology. Build, manage and operate instruments of production.

2 Teach this knowledge to the young, by formal education or apprenticeships.

3 Chose people for jobs by competence and relative merit; promote and demote on the basis of performance.

4 Afford opportunity to individual or collective enterprise; encourage initiative, competition and emulation.

5 Allow people to enjoy and employ the fruits of their labour and enterprise.

Corollaries

Gender equality, no discrimination on the basis of irrelevant criteria, preference for scientific rationality over magic and superstition.

Political and social institutions which favour progress and enrichment

a) Secure rights of private property, the better to encourage saving and investment.

b) Secure rights of personal liberty.

c) Enforce rights of contract, explicit and implicit.

d) Provide stable government, of laws rather than men.

e) Provide responsive government, that will hear complaints and make redress.

f) Provide honest government: no rents to favour or position.

g) Provide moderate, efficient, ungreedy government, holding taxes down, giving back surpluses and avoiding privilege.

What interested me, from a psychological point of view, was that Landes was reluctant to talk about culture making a difference between one set of peoples and another. He was somewhat apologetic, saying that culture had sulphurous connotations. Odd. One should look for explanations wherever one can find them, and evaluate their contribution energetically. Culture is a collection of habits, both good and bad, which have developed over time in response to problems, and contain solutions of varying levels of appropriateness and success. People compare cultures, and pick up the ideas and products which they find useful. The wheel took a long time to invent. Some cultures never achieved it. Those that did gained an advantage. Some cultures are better than others in prospering in competition with each other.

Later work has supported the idea that culture makes a difference, and that people make cultures. For example: “Cognitive Capitalism: The Effect of Cognitive Ability on Wealth, as Mediated Through Scientific Achievement and Economic Freedom
Heiner Rindermann and James Thompson DOI: 10.1177/0956797611407207

I picked this figure rather than the more complicated and complete Fig 4 simply for purposes of exposition. I think that any group of people who had an eminent scientist in the past two thousand years can claim to have a culture, and it is good to see the eminent-scientists measure of culture making a significant contribution to current attainments in science, technology, engineering and mathematics, and thereby a contribution to Gross Domestic Product.

Finally, on a wider but certainly currently pressing issue, at a time when our global economy is in one of its recurrent swirls of turmoil, and economists are propounding confident schemes of improvement, it is salutary to recall that Landes ended his magnum opus thus: “The one lesson that emerges is the need to keep trying. No miracles. No perfection. No millennium. No apocalypse. We must cultivate a skeptical faith, avoid dogma, listen and watch well, try to clarify and define ends, the better to choose means.”